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5. Big Corporation (BC) follows a moderate current asset investment policy, but is now considering a change, perhaps to a restricted or maybe to a

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5. Big Corporation (BC) follows a moderate current asset investment policy, but is now considering a change, perhaps to a restricted or maybe to a relaxed policy. BC's annual sales are $400,000; its fixed assets are $100,000; its target capital structure calls for 50% debt and 50% equity; its EBIT is $55,000; the interest rate on debt is 9%; and its tax rate is 25%, with a restricted policy, current assets will be 15% ofsales, while under a relaxed policy, current assets will be 25% ofsales, what is the difference in the projected ROEs between the restricted and relaxed policies

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